Darner Motor Sales v. Universal Underwriters

140 Ariz. 383, 682 P.2d 388 (1984)


Darner (P) held liability insurance with Universal (D). The first policy was for a universal u-drive policy. P had insurance with Travelers, and the balance of P’s insurance continued with Travelers at the time the first policy was written by D for P. In April 1975, D picked up the entire insurance package for D’s various business activities. When P contracted with D for all his needs, he was assured that D's agent that the policy would be the same as the prior coverage from Travelers. When P received the new umbrella policy, he questioned certain aspects of the coverage but was assured by D's agent that the umbrella policy would increase the 15/30 coverage to 100/300. After these conversations, D did receive a copy of the umbrella policy, and it was quite lengthy and forbidding. D admits never reading it and claims it was like reading a book and that following his conversations with the agent he didn’t think that reading it was necessary. A car was rented to Dwayne Crawford twenty months later, and the rental agreement that was used was an old type that covered Dwayne for 100/300. Dwayne was in an accident and claimed the 100/300 limit. Universal was unwilling to supply coverage over the $15,000 limit. Dwayne sued P and P sued D. The pedestrian recovered $60,000. D paid over the $15,000 and refused to pay more and P claimed the rest was due from D under estoppel, reformation, negligence, and fraud. After discovery D moved for a summary judgment. The motion was granted, and P appealed. The Court of Appeals affirmed because an insurer who had received a copy of an unambiguous policy could not expand the insurer's liability beyond the terms of the policy issued.